“Profits in Paris: Earn 4,620% from this Secret Oil Discovery”

Paris Shale Oil tease from Money Map Report

By Travis Johnson, Stock Gumshoe, September 17, 2009

I know that almost all of you have probably seen this ad …

“Texas Company Tapping $2.8 Trillion Oil Reserve… Under the Eiffel Tower

“Tiny company from Dallas preparing to extract 40 billion barrels of crude oil from beneath Paris, France…

“Discovery big enough to fuel U.S. demand for 5.2 years, according to Energy Information Administration…

“Estimates show 4,620% gains for investors who get in now… before this oil comes to market…”

Now that’s a good teaser, eh? I can just picture Gustave Eiffel’s engineering masterpiece as an oil derrick, spouting crude in a massive burst over the tour boats on the Seine. Good stuff.

And of course, many of you know who this company is already, since I mentioned it in the email about a week ago (that’s a lesson to all of you — sign up for the free Daily Update email if you want all the info!) … but I didn’t go into any detail, or confirm the guess, so let’s get into it.

The ad is for the Money Map Report, one of many confusingly-named letters in the great Agora universe, and the letter’s from publisher Mike Ward. He’d like you to sign up for your $50 subscription to learn about this Paris oil driller … feel free to subscribe, if you like, but if you just want the basic info, read on …

Here’s what they say about the discovery, and how it was made:

“The Forgotten Treasure beneath the City of Lights

“Known as the Paris Basin, this layered formation juts thousands of feet into the earth. It forms an oblong bowl 310 miles long and 186 miles wide.

“At the basin’s surface you’ll find vineyards producing the finest wines in the world, along with gourmet cheeses and other natural wonders. (Dom Perignon Champagne comes from a small town resting atop the basin.)

“But beneath that gilded soil – with the Eiffel Tower near its epicenter – the geological team from Texas discovered huge crude oil deposits….

“Their estimates showed 30 million barrels, at least. But they needed more time, and money, to complete their surveys.

“When a Small Company Risks Everything and Wins

“So the company (we’ll call it the “Tiny Texan”) decided to take an enormous risk.
It sold off its U.S.-based operations. Every oilfield, well and piece of equipment went up for sale.

“Then they took the millions in proceeds and poured them into the Paris project.

“Shortly after doing so, the company confirmed the first 30 million barrels. (Just as quickly, it purchased the rights to that discovery from the French Oil Ministry.)

“But what nobody knew at the time was just how big the discovery would become.

“The geologists hadn’t actually confirmed the physical limits of the accumulation.

“Discovery Grows from $5.04 Billion… to $2.8 Trillion

“So the company decided not to bring the oil to market – yet. The geologists continued surveying.”

So that part, at least, is certainly real — the Paris Basin has been producing oil for a long time, and for a while back in the early 1980s they even had a bit of an oil boom, with Parisians surprised to see the seismic data collection trucks in downtown Paris. But the oil, though it’s still being produced from some substantial fields in the basin, wasn’t easy enough to extract, or the reservoirs not as dramatic as had been hoped, and a lot of the oil exploration tailed off for 20 years or so.

And there is apparently some urgency to this story …

“In November 2009, the Tiny Texan will switch on Oil Well #1, on the outskirts of Paris, tapping into the first 30 million barrels.

“This historic event would be enough to triple the company’s oil inventory. And it’ll certainly be enough to jolt the bottom line, and launch this story into the mainstream investing media.

“The importance of getting in before the big event cannot be overstated.

“But this is merely the beginning.

“The Tiny Texan has an additional seven wells coming online right afterwards. They’re located to the south of the city, too.

“Combined, the first eight wells will tap into 66 million to 72 million barrels worth about $4.6 billion. That’s enough to drive the company’s market cap up 4,620% from current levels around $100 million.”

In case we needed more clues, we learn a little bit about the institutional investors who are putting money into the firm:

“Goldman Sachs just bought 1.07 million shares for its house accounts.

“Barclays bought 1.04 million shares with its own money.

“Palo Alto investors bought nearly 2 million shares.”

So what are we dealing with here?

This company is Toreador Resources (TRGL)

And I was hoping that if I waited a few days to write to you about it, the initial enthusiasm over these shares would die down a bit, but they’re still holding pretty firm at just under $8 a share, a good 50% jump from the $5 or so that the shares traded at before this ad began running last week (they did have a market cap of roughly $100 million, now it’s about $160 million).

I’d still imagine that, unless we see oil spike higher or some early and unexpected news from Toreador, that the price seems very likely to come down a bit — big spikes like that from newsletter attention don’t usually last that long. I could be wrong, of course, but I’d be surprised if we didn’t see the shares tail off a bit in the coming weeks if the marketing push slows down.

Toreador does hold some other interests in Europe, in both Hungary and Turkey, but they seem to be very focused on the potential of the Paris Basin projects and they’re trying to sell off their other holdings to focus their energy.

The company was indeed a Texas firm, focused on oil royalties, until they bought Madison Oil and Pogo Hungary several years ago and decided to build up their European concessions and production. More recently, this year, they announced efforts to focus more specifically on their Paris Basin oil shale projects, smelling the potential for transformative production there.

So yes, as the ad implies, this is a “Tiny Texas Company” that’s using the horizontal drilling and fracturing technologies that have been so successfully applied in the Williston Basin/Bakken oil fields to try to dramatically increase oil production in the Paris Basin.

Now, I can’t tell you whether or not they’ll be successful — they are planning to start drilling the La Garenne well later this year, which is aimed at a resource that they estimate could be up to 30 million barrels, but do take some caution from the fact that this is still being called, by the management, the “proof of concept” phase for the unconventional production in the Paris Basin — getting from that first potential 30 million barrel well (they estimate it as somewhere between 8 million and 30 million, actually) to exploiting a potential 40 billion or 65 billion barrel resource (the numbers depend on who you ask) is a long and difficult journey.

They seem quite confident, but of course they would be … so you never know. Their recent operational update is available here. It seems quite likely that successful drilling at La Garenne would enable them to upgrade their reserves numbers pretty significantly, but that’s just a guess and it’s going to take a lot of drilling to build up the kind of potential reserves (let alone production) that this ad teases.

Toreador is still in a period of transition, trying to “monetize” their Hungarian and Turkish operations and cut costs elsewhere to invest in Paris, and there isn’t really any analyst coverage (they’d probably be mostly guessing, anyway), but you can at least see their latest financial results here, and you can listen to their last conference call here.

Note that the company did ride a serious rollercoaster over the past five years — it may not have any meaning for the current company focus, but they rode their European production and discoveries to a $30 share price in 2006, and watched the shares collapse in 2007 and 2008 even as oil rose to new heights. The shares were in the dumps when the reorganization was announced early this year, so it’s probably worth cautioning that there’s likely to be a lot of investor sentiment riding on the success (one hopes) of this one well in the Paris Basin.

So what do you think? Can this Toreador profit from the oil bull? Does it seem more appropriate that they’re called Toreador Resources when you realize that the Eiffel Tower was originally proposed for Barcelona, not Paris? Do you think we’ll see another Bakken-like oil shale craze in the Paris Basin? Let us know your thoughts with a comment below.

And if you’ve ever subscribed to the Money Map Report, please click here to review it for us and let us know what you thought. Thanks!


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43 Comments on "“Profits in Paris: Earn 4,620% from this Secret Oil Discovery”"

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Steve McClurg
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Steve McClurg
September 17, 2009 12:55 pm

As always, great job of uncovering these “opportunities”! I love your style of writing and you amaze us with your detective work and depth of research. I have no idea whether this is a great investment but I’m going to watch for a pullback to find a decent entry point. Keep up the great work Gumshoe!!!

Myron Martin
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Myron Martin
September 17, 2009 1:22 pm

My son identified this company BEFORE I even got my Money Map issue to confirm it, so he git in early and I bought just 200 shares to track the stock. Probably will buy more on a pull back.

I firmly believe oil is heading back up towards $100. a barrel and major finds like this, while SPECULATIVE are potentially very explosive and worth any risk that lurks in actual execution of the play.

If you wait to buy until the first well PROVES out you will miss the major part of the stock price increase!

Karel Beelaerts van Blokland
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September 18, 2009 9:33 am

Found Toreador myself. Think small oil companies in Europa and Australia are far more interesting than these hyped stock letter tips.

Toreador already found this by selling there US assets. Pitty they are not listed on the LSE to give them more European attention.

Must agree wonderfull job you are doing by searching those tips. Helps educate stupid investors ager following the crowds.

Robert Long
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Robert Long
September 18, 2009 12:42 pm

I don’t think the french will let them drill under a National momument

gary imburg
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gary imburg
September 21, 2009 9:35 pm

The Eiffel tower may become the next leaning tower in Europe.

Mickey
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Mickey
September 22, 2009 2:42 pm

I was also wondering whether or not this company has secured drilling rights and how long these rights are extended . Does anyone know. OH, and for what price to the French Government??

Scott Clinton
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Scott Clinton
October 29, 2009 9:01 pm
If that potential existed, some little Tiny Texas company would not be the company drilling a Horizontal well in the middle of a city. The country probably gets 25 to 30 percent in Royalities and this small company probably has 10%, that is 10% of 70%, which is 7 %. If they produce 30 million bbls, that is 4,101 bbls of oil per day for 20 years with NO decline rate (impossible), this well will have to come in at 10,000 bbls of oil per day and will have an Annual Decline Rate of about 10-12%. So 7% of 30… Read more »
Michael Pagan
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Michael Pagan
October 30, 2009 3:49 am

Excellent work Travis and team! A speculative play but my concern (as Robert Long pointed out above) is a political one about the relationship between France and the US. The French tend towards protectionism and will want a French company to benefit from this discovery if it is significant. We shall see. One of those ones that you wish you had enough spare cash to risk a decent punt on it – but it is a gamble.

Marc
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Marc
October 30, 2009 1:40 pm

The newsletter mentions a French Oil Ministry/Minister which/who never existed.

In France the government authority for energy matters (including oil) is the Ministry of Ecology, Energy, Sustainable Development and Sea (http://www.developpement-durable.gouv.fr/).

Andrew
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Andrew
October 31, 2009 4:24 pm
The governemnt body in France responsible for oil is La Direction des Hydrocarbures (DHydro). The French have known that the oil is there, in the Paris Basin for 40 years, but it is not very mobile, so not very much is being extracted. The key question is whether Toreador’s new drilling technology can get it to move. They have recently appointed a former director of Total to their board, so presumably Total would get cut in if it works out well. Most of the wells they propose to drill are not far frpom where I live, about 80 miles SE… Read more »
Mandeep
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Mandeep
November 5, 2009 7:07 am

Finally, what do you guys suggest – TO BUY OR NOT TO BUY THIS STOCK (@ around $9/ share)? thanks

who noze
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November 9, 2009 10:22 pm

many more years that i care to remember i bght toreador @25cents not to long aftreri sold for a buck 6mo. to a yr. later it was 40 dollars a shareit seems that they took whatever capitol they had and bght into other stocks eventually they were sued by the stockholders get rid of their holdings for the stock holders benefit

Nardini
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Nardini
November 15, 2009 4:26 am

Obviously, Robert Langdon is behind this. Who else could arrange for the French government to give a small Texan oil company carte blanche to turn the centre of a major city, the capital cithy of France, into an industrial zone purely for the bbenefit of the USA. Think about it. Do you see any rational thought behind this particular claim?

Muley
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Muley
December 5, 2009 11:19 am
Ridiculous comments re turning Paris into an industrial zone. They obviously would not be able to gain access nor would they want to be within the city center. As in Canada they will have rights to drill the underground resource. However they will still need to gain permission for a site to set up their drill rig. This takes at least a few acres and would be on agricultural land removed from residential/industrial parts of the city. Before gaining permission to drill there would be referrals to adjacent resource users and land owners. Obviously the more congested the area the… Read more »
JPSF
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JPSF
December 9, 2009 6:34 am

Look up Lundin Petroleum (Swedish), who have been there a number of years are producing ~ 400 bbd. Toreador’s technology will likely pull out a much larger production, and once proven out, so would Lundin.

JSF

Peter Draganac
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December 10, 2009 3:44 pm

Who the heck is this “Death of Wall-mart company?
Do these Motley Fools really think that Wall-mart is ready to hand over the keys to their kingdom? Not !
They hire the brightest and best so they can stay where they are…
Peter D.

Ted
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Ted
December 11, 2009 9:21 am

What is the name of the company again. What stock exchange are they on?

richard barnett (Barnett Oil Co, Tulsa, OK.
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richard barnett (Barnett Oil Co, Tulsa, OK.
December 14, 2009 12:06 pm

I am doing some research on who has the best chance to come out on top.

Are you speaking of Total a Dallas, TX company? Or other

Sachakin
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January 5, 2010 6:28 am

French company TOTAL should be interested. But I think the Government will chose also the independant french company MAUREL ET PROM (ISIN: FR0000051070 – Ticker: MAU). Even if they have their headquarter in Paris, it will be difficult for TRGL …

John Cook
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John Cook
January 23, 2010 9:11 pm

It appears that BP and Toreador are in talks right now. The NY Times said that BP wanted to purchase TRGL, which I have owned since September. I find a good deal of information on the TRGL pages of IHUB.com. Closed at $13.05 on 1/22/2009. I bought it at about $4.75 and more around $8.00.
John C

scott deck
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January 27, 2010 8:34 pm

The question now is should a person buy more? I maintain if you are attracting the big dogs there must be some validity in project. Unless it was a TRGL plant of of facts that are only a little true. So do I add some more?

RTH
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RTH
February 5, 2010 4:08 pm

Company “insiders’ have been steadily selling since 9-18-08 at $8.19 per share and . . . they don’t appear to have resumed buying since then. Hmm…..

http://www.insider-monitor.com/trading/cik98720.html

rini
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rini
February 8, 2010 12:02 am
Tough question: to buy, short, take options, or hedge? It moves too suddenly, see chart below. InvestmentU just came out with ANOTHER TEASER ON SAT, FEB 06, which claims there MAY be a takeover bid “within the next five days.” I think the teaser mentions that the bigboyz have already taken positions. so maybe the play is about played out?? Consider the jump up in price and volume approx Jan 20 – 27, after the New York Times article on Jan 20, and the Jan 25 report about BP, Royal Durch Shell, and Statoil entering into confidentiality agreements. THEN, Look… Read more »
david
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david
February 11, 2010 12:17 pm

they did announce a secondary stock offering at $8.50. Dilution of shares, is that why the stock has retreated?

kevin
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kevin
February 16, 2010 3:14 pm

is there any validity to the talks they are having with some of the big players or have these seemed to fizzle out? Also, as David stated on Feb. 11, the stock offering of $8.50 would naturally drive the price down to that level. wouldn’t it?

Barry
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Barry
February 20, 2010 2:44 pm

Nobody has mentioned environmental issues. Europeans are super- sensitive. Do you think the French are going to allow a US Co. to contaminate their water supply w/ fracking lube? I don’t think so.

LEONARDHUMPHREY
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LEONARDHUMPHREY
February 23, 2010 6:17 pm
SEEMS TO HAVE FIZZLED AS 3 MIL SHARES GOT OFFERED AND NO NEWS FROM THE COMPANIES LOOKING AT THEM NOW IN 3 WEEKS AND THEY WERE SUPPOSED TO HAVE MET IN NEW YORK FOR DISCUSSIONS. ALSO OFFERRED A LIBERAL 16 % DISCOUNT ON SHARES. LATERAL DRILLING LINES USUALLY IN THE 1500 FT LENGTH BUT I DID SET ONE IN THE BARNETT OUT TO 5000 ‘. THEY WILL HAVE PROBLEMS AS THESE WELLS ARE SHALLOW AND IF 2000 FT OF SURFACE ARE SET TO PROTECT FRESH WATER SANDS, THEN THE KICK OUT WILL START QUICKLEY FROM THERE. THEY ALSO SEEM TO… Read more »
Sergio
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Sergio
February 25, 2010 11:53 am

Following your interesting article of September last, I bought some shares of Toreador. Probably I arrived too late when the prices were about 8 $ a share. Price went up and soon down again. Now I consider the possibility of selling out.
May be the Europeans are making all sort of difficulties.
Sergio
25 February 2010

canbyte
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canbyte
April 9, 2010 7:28 pm

Just found out. I'll pass. Barry is onto something – eventually environmental issues will crop up but not until bad news breaks somewhere on this issue. Or maybe someone will invent a less toxic mud??

tooppy
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April 10, 2010 9:58 pm

I received this rubbish months ago. I am French and have been in the oil exploration business for a while.
Could you believe one minute TOTAL hasn't search all over France ? They know exactly what is under Paris and they perform horizontal drilling since the seventies.
You want to make money with this "exceptional knows better tiny firm we are the best" ? Short it !

Go here on page 7 you have the map of the fields under Paris :
http://www.drire.gouv.fr/ile-de-france/energie/Tr

jfreudenberg
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jfreudenberg
April 11, 2010 1:26 am

Paris Basin Oil;

A Swedish or Norwgian Co, Lundin, I think has been taking oil from the Paris Basin for ~ 10 years. (See Google) It has been known for a long time, but shale extraction techniques are relatively new.

Toreador seem to be having a tough time getting up to speed.

JSF

Suzanne
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Suzanne
April 18, 2010 8:20 am

They do have a permit for the La Garenne site
http://www.developpement-durable.gouv.fr/IMG/pdf/

look at page 18 and on page 19 you can even see how far they are with drilling

At the time of the report, November 2009, they had 5% of the market

cdoron
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cdoron
April 20, 2010 10:11 pm
I'm french too and i can give you some informations you can find on the web: http://www.drire.gouv.fr/centre/sous-sol/hydrocar… but you have to read french ! Toreador is present in France since 2001. Some major firms such as Statoil, Royal Dutsh shell and BP are very interested to buy the junior Toreador: 01/21/2010: "Trois géants pétroliers discutent d'un possible rachat du groupe américain Toreador Resources, qui cherche des gisements pétroliers en France, rapporte le New York Times. BP , Royal Dutch Shell et Statoil ont signé un accord de confidentialité avec Toreador, et ont prévu d'en évaluer les possessions, ajoute le journal,… Read more »
Will
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Will
April 21, 2010 11:29 am

Knowing the oil/gas is there is one thing. Knowing how to get it out is another.

BUT the most important part is… the diferential between the long-term price of oil/gas, and the costs involved in getting it out of the ground (versus the alternative costs of alternative energies).

If the technology used makes cheaper extraction/environmental costs, and the price of oil remains higher for longer term, then it makes sense to drill/frac/lube for it.

Simples! :¬))

W.

Cuizcal
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Cuizcal
September 12, 2010 7:35 pm

Lateral frac drilling is BAD news for the local ecology because it interferes with the phreatic layers. Give it a few years and we might discover that Toreador bit into a poisoned fruit of tort liabilities in a region with 12M plus residents.

Rod Garrett
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Rod Garrett
September 21, 2009 5:16 am

Clever son. Now tell us the name of the company….please!

Gravity Switch
Admin
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September 21, 2009 9:07 am

Rod, he’s talking about the same firm I wrote about, Toreador.

Jennifer Dow
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Jennifer Dow
October 31, 2009 10:42 am

Actually Scott I wish you wouldn’t stop. You seem to have alot of knowledge on oil that I think we could benefit from. Any good investment decision is best considered from a contrarian perspective. Helps balance off the hype side. Issues of royalties to the French will have an impact on share price if they are near the levels you suggest. Do we know what is in the agreement between Toreador and the French?

Scott
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Scott
November 1, 2009 12:22 am
After reading some News Releases on Toreador’s website, they do have a 100% working interest on a 649,000 acre “Rigny Le Ferron permit” outside of Paris, France. I do not know the conditons of that permit, I am guessing it allows them to produce from the Paris Basin Oil Shale only. Producing oil from a “Shale” formation is considered an unconventional operation and Horizontal Drilling and huge Fracture treatments are used,(very expensive). While producing oil from Sandstones and Limestones, mostly by vertical wells, are considered Low-Risk conventional operations. I think all the oil that has been produced to date from… Read more »
Gravity Switch
Admin
11
December 10, 2009 3:53 pm

Peter, I don’t think I’ve ever written about that claim of theirs, but the company I most often see them tout as the Wal-Mart killer is Costco. A stretch, I agree, though I do like Costco.

Gravity Switch
Admin
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December 14, 2009 12:11 pm

Still Toreador, still on the Nasdaq (TRGL).

Lydia A
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Lydia A
January 19, 2010 4:24 am

StockGumshoe-Great information here, I am glad I found your site, it will make my research much easier in future. I also received the Money Map circular. I did confirm all the institutional investors through my research page on my investment account. I also found http://www.GuruFocus.com to be a good source to see who had bought in to this stock. George Soros owns 200,000 shares. I have moved forward with a purchase of this stock since last December, but am very vigilant.
Thanks again,

TV Guy
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TV Guy
April 10, 2010 6:29 am

solid math, Scott ! thanks for the work !! Much appreciated !!

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